Sabre Blasts IATA and Defends GDS Role in Distribution

The ongoing clash between airlines and global distribution systems continues, with travel agents at the center of the controversy. Chris Kroeger, senior vice president – Sabre Travel Network, offered a sharp rebuttal to charges leveled in the International Air Transportation Association’s (IATA) official publication, Airlines International, (February-March edition) entitled Distribution - Sum of the Parts. The IATA report first appeared February 27 on TravelAgentCentral

In a letter to Travel Agent, Kroeger, a veteran travel industry executive, took issue with the viewpoints offered in the IATA article that included the perspectives of IATA executives and airline executives that questioned the innovation capabilities of GDSs, among whom Sabre is a major global player.

“If we are going to continue advancing this industry forward, then there needs to be a healthy dialogue that is based on current realities, not long-held and often-touted misperceptions and misinformation,” Kroeger said.

IATA charged that, “Technology with origins dating back to the 1960s, such as that imposed upon travel agencies by the GDS middlemen, simply cannot support the nature of the data required to provide accurate, dynamic price quotes consistent with the way consumers are buying travel today. “

“It is important that U.S. legislators and federal regulators recognize that as monopoly suppliers, GDSs have no incentive to innovate in order to allow passengers to purchase the airline services that meet their particular needs,” IATA continued, quoting Douglas Lavin, IATA regional vice president for North America. “Regulations that compel airlines to sell their products and services through antiquated GDS systems will put a damper on the innovation we already see on the part of airlines and third-party providers in this area.”

Sabre’s Kroger responded, defending Sabre’s record of innovation in a highly competitive industry and Sabre’s ability to serve both travel agents and airlines. “I read with interest your recent coverage of IATA and their views on GDSs, agents, and distribution. Once again, IATA leadership has exposed itself as being woefully out of touch with today’s marketplace. I would like to address a few of their most blatant inaccuracies.”

Kroger’s response in full:

“IATA characterizes GDSs as operating 1960s technology. Speaking for Sabre, nothing could be further from the truth. Our technology environment includes over 8,000 open system servers with an average age of less than three years, processing over a billion webservice and XML transactions a day with sub-second response time. On top of that environment sits the Sabre Red Workspace, a modern, graphical-enabled agent interface built on the same, open source Eclipse Rich Client platform used by eBay and NASA. Our technological prowess has been consistently recognized by experts in technology. For example, Sabre has been ranked as one of the world’s top 500 innovative companies by InformationWeek seven years in a row and has twice been the recipient of the prestigious Computer World Laureate Award.”

“IATA suggests GDSs can’t handle the new ways airlines want to sell their products and relies on the views of a former airline executive to make many of those negative attacks. Those of us still driving the industry today know better and at Sabre, we have been helping airlines sell in new ways for years. “

“Airlines can sell using bundles, known as branded fares, or they can sell ancillaries in an unbundled approach. Recently, Sabre was the first GDS to provide an end-to-end merchandizing solution for airlines using industry technology standards.”

“Our goal is simple - help airlines grow their revenues and at the same time ensure agencies can sell airlines’ products in an efficient and effective manner. Contrary to IATA’s apparent view, we know both can be accomplished at the same time. And the growing number of airlines agreeing to sell their branded fares and ancillaries via the Sabre marketplace is evidence of that.”

“IATA and the former executive suggest that GDSs have no motivation to invest and innovate. Again, they are flat out wrong. We invest $100s of million each year, leveraging the latest technology into innovative solutions for our customers. And the reason we make those investments in technology is simple. We operate in a highly competitive marketplace and we must innovate to meet the constantly evolving needs of a dynamic industry.”

“Finally, IATA suggests that agencies are bound by restrictive GDS contracts. Certainly, when airlines owned the GDSs, contracts were more restrictive. However, speaking on behalf of Sabre, I can assure you that in today’s highly competitive marketplace, our agency customers have significant flexibility under their Sabre contracts. This highly competitive marketplace keeps us on our toes every day and requires us to constantly enhance our products, services, and contract terms for both travel agencies and airlines. “

“There is actually one area in which I am in complete agreement with IATA and that is the need for industry technology standards. We fully support and are already leveraging the industry technology standards that were created by entities like ATPCO and ARC, which, like IATA, are owned by the airlines. Technology standards benefit everyone in travel distribution; they lower costs and increase productivity. We have been at the forefront of working with these entities to develop those technology standards and will continue to help the industry fully realize the benefits of those standards. “

“At Sabre, we have launched our Let the Market Fly initiative to ensure that healthy - and accurate - discussion is taking place. We are a firm believer in transparent marketplaces and are committed to making sure airlines, travel agencies, corporations, and consumers are all flying high in the travel marketplace.”

Kroeger has led the Sabre Travel Network North America, Latin America, EMEA and Global Customer divisions, where he had responsibility for sales and service for leisure travel agencies, online travel agencies, travel management companies and corporations.

He has also served as president of GetThere, Sabre’s corporate travel unit. Kroeger has been with Sabre for 20 plus years and led the launch and development of Jurni Network, the Sabre leisure agency consortium, and was the general manager for Nexion, the former full-service host agency of Sabre. Kroeger was named ASTA’s 2011 Allied Member of the Year.